31
GCC Fixed Income Chart Book Market Insights & Strategy Rakesh Sahu / Chavan Bhogaita 2019 1H Review 11 th July 2019
GCC Fixed Income
Chart Book
Market Insights & Strategy
Rakesh Sahu / Chavan Bhogaita
2019 1H Review
11th July 2019
2
Disclaimer
Disclaimer: To the fullest extent allowed by applicable laws and regulations, First Abu Dhabi Bank (the “Bank”) and any other
affiliate or subsidiary of the Bank, expressly disclaim all warranties and representations in respect of this communication. The
content is confidential and is provided for your information purposes only on an “as is” and “as available” basis and no liability
is accepted for or representation is made by the Bank in respect of the quality, completeness or accuracy of the information
and the Bank has undertaken no independent verification in relation thereto nor is it under any duty to do so whether prepared
in part or in full by the Bank or any third party. Furthermore, the Bank shall be under no obligation to provide you with any
change or update in relation to said content. It is not intended for distribution to private investors or private clients and is not
intended to be relied upon as advice; whether financial, legal, tax or otherwise. To the extent that you deem necessary to
obtain such advice, you should consult with your independent advisors. Any content has been prepared by personnel of the
Global Markets division at the Bank and does not reflect the views of the Bank as a whole or other personnel of the Bank.
The Bank processes your personal data to provide you with information or promotional and advertising communications on
products, services, other events and campaigns. If you wish not to receive any emails from the Market Insights team at the
Bank, please click here to send us your request to unsubscribe, and you shall no longer receive such information.
You are entitled according to the applicable laws to exercise your rights to access, to rectification, to erasure and to portability
of your personal data, to restrict the use of and to object to the processing of your personal data. You may exercise your
aforesaid rights by sending your request to FAB at the following address: [email protected].
3
Foreword
Welcome to our periodic chart book for the GCC fixed income market. The idea is very simple – to give those of you who follow this market a
quick snapshot of some of the key points in terms of the following:
Overview of the GCC fixed income market
GCC fixed income market performance so far this year
Primary Market issuance year-to-date
Market developments and relative value analysis
Secondary Market performance of key instruments (snapshot from 31st December 2018 to 9th July 2019)
We have deliberately made the report text-light in an attempt to make it easier to digest. Hopefully you will find it both interesting and useful.
If you have any feedback on the report, or indeed would like to discuss any of the points highlighted, please do contact us.
Chavan Bhogaita Rakesh Sahu Managing Director & Head of Market Insights & Strategy Director, Market Insights & Strategy
Global Markets, FAB Global Markets, FAB
[email protected] [email protected]
+971 2 6110 127 +91 22 333 11138
Please click here to view our recent publications on MENA and Global Markets
4
GCC bonds have delivered stellar returns so far this year
Note: Indices shown above are Bloomberg Barclays bond indices available on Bloomberg; All country index are aggregate index for US$ bonds issued from that country; GCC US$ Inv. Grade (A+): BGCITRUU Index; GCC
US$ IG & HY (A): BGCCTRUU Index; EM Asia US$ Inv. Grade (A-): BEUGTRUU Index; EM Asia US$ aggregate (BBB): BEUCTRUU Index; EM Inv. Grade US$ (BBB+): BEHGTRUU Index; EM Hard CCY Aggregate (BBB-):
I23121 Index: GCC Sovereigns aggregate index (IG & HY); LG20TRUU Index; UAE aggregate index: I29135US Index; KSA aggregate index: I29134US Index; Qatar aggregate index: I29133US Index; Kuwait aggregate index:
I29132US Index; Oman aggregate index: I31504US Index; Bahrain aggregate index: I28750US Index; Data shown till 9th July 2019; Source: Bloomberg/FAB
3.00
3.25
3.50
3.75
4.00
4.25
4.50
4.75
UAE Aggregate Yield
Yield change: -123bps
Total Return: +8.25%
5.00
5.20
5.40
5.60
5.80
6.00
6.20
6.40
Bahrain Agg. Yield
Yield change: -119bps
Total Return: +10.05%
3.00
3.20
3.40
3.60
3.80
4.00
4.20
4.40
4.60
KSA Agg. Yield
Yield change: -107bps
Total Return: +11.55%
3.00
3.20
3.40
3.60
3.80
4.00
4.20
4.40
Qatar Agg. Yield
Yield change: -91bps
Total Return: +8.83%
2.50
2.70
2.90
3.10
3.30
3.50
3.70
3.90
4.10
4.30
Kuwait Agg. Yield
Yield change: -119bps
Total Return: +7.15%
5.40
5.60
5.80
6.00
6.20
6.40
6.60
6.80
7.00
7.20
7.40
Oman Agg. Yield
Yield change: -132bps
Total Return: +11.12%
70
75
80
85
90
95
100
105
Jan
19
Fe
b1
9
Ma
r19
Ap
r19
Ma
y1
9
Ju
n1
9
Ju
l19
Bloomberg BarclaysGCC Sov IG & HYYTD actual spreadchange: -30bps
JP Morgan EMBIDiversified SovYTD actual spreadchange: -51bps
J.P. Morgan EMBI PlusSovYTD actual spreadchange: -19bps
Sovereign credit spread on a rebased scale starting 2-Jan-19
EMBI Diversified Sov
(JP Morgan)
Current spread: 337bps
YTD change: -78bps
EMBI Plus Sov
(JP Morgan)
Current spread: 403bps
YTD change: -42bps
GCC Sov IG & HY
(Bloomberg Barclays)
Current spread: 149bps
YTD change: -51bps
GCC sovereigns
outperformed EM sovereigns
BBB-
BBB
BBB+
A-
A
A+
+8.9%
+8.4%
+9.2%
+7.8%
+9.4%
+9.6%
3% 4% 5% 6% 7% 8% 9% 10%
EM Hard CCY Aggregate (BBB-)
EM Asia US$ (BBB)
EM Inv. Grade US$ (BBB+)
EM Asia Inv. Grade US$ (A-)
GCC US$ Aggregate IG & HY (A)
GCC US$ Aggregate IG (A+)
YTD Total Return (%): EM / GCC bond index (credit rating shown are avg. rating of index)
GCC US$ IG + HY
EM Inv. Grade US$
EM Asia US$
EM Asia US$ Inv. Grade
EM Hard CCY Aggregate
GCC US$ Inv. Grade
Better risk reward on offer from GCC credits
5
GCC fixed income – Market composition by country
Notes: * For the above analysis we have considered major hard currency ($/€/£/A$) bonds and sukuk issuances from the six nations in the GCC. This includes both fixed and floating rate issuances of
$100m or above and maturity of 1-year or above.; * Bond value shown are aggregate outstanding value as at 5th July 2019; GRE stands for Government related Entities; Source: Bloomberg/FAB
UAE: $131.7bn
Sovereign $24.4 18%
GREs $52.1 40%
Financials $45.9 35%
Corporates $9.3 7%
KUWAIT: $17.0bn
Sovereign $8.0 47%
GREs $0.0 0%
Financials $4.5 27%
Corporates $4.5 26%
BAHRAIN: $23.8bn
Sovereign $17.9 75%
GREs $3.7 16%
FIs $2.2 9%
Corporates $0.0 0%
Total US$ value of hard currency ($/€/£/A$) bonds and sukuk outstanding: $382bn*
KSA: $104.8bn
Sovereign $62.9 60%
GREs $25.7 24%
Financials $15.3 15%
Corporates $0.9 1%
QATAR: $74.7bn
Sovereign $45.4 61%
GREs $8.3 11%
Financials $20.0 27%
Corporates $1.0 1%
OMAN: $29.8bn
Sovereign $23.5 79%
GREs $3.5 12%
FIs $2.7 9%
Corporates $0.1 0%
4%
6% 8%
20%
27% 35% $131.7b $104.8b
$74.7b
$29.8b $23.8b
$17.0b
6
GCC fixed income – Market composition by issuer type
Notes: * For the above analysis we have considered major hard currency ($/€/£/A$) bonds and sukuk issuances from the six nations in the GCC. This includes both fixed and floating rate issuances of
$100m or above and maturity of 1-year or above.; * Bond value shown are aggregate outstanding value as at 5th July 2019; GRE stands for Government related Entities; Source: Bloomberg/FAB
KSA
35%
Qatar
25%
UAE
13%
Oman
13% Sov
$182.0b
47.7%
24.4%
4.2% 23.7%
$182.0b
$90.6b $15.9b
$93.3b
Total US$ value of hard currency ($/€/£/A$) bonds and sukuk outstanding: $382bn*
KSA
27%
UAE
56% GREs
$93.3b
Kuwait
28%
UAE
59%
Corps
$15.9b
UAE
51%
Qatar
22%
KSA
17%
Fins
$90.6b
7
GCC fixed income – Market overview of credit quality*
Notes:
** For the above analysis we have considered major hard currency ($/€/£/A$) bonds and sukuk issuances from the
six nations in the GCC. This includes both fixed and floating rate issuances of $100m or above and maturity of 1-year
or above.; * Bond value shown are aggregate outstanding value as at 5th July 2019
BB range
99.5%
B range
85.8%
AA
48.6%
AA
22.1% BBB
range
19.6%
A
69.7%
AA-
63.7%
A+
14.9%
A-
14.2%
* We have considered the credit ratings of issuers or guarantors of the bonds; Credit rating shown are composite credit rating (please refer to the appendix for details); KSA based Supranationals – Islamic
Development Bank (AAA), Apicorp (AA-) & Islamic Corp. for the Development of the Private Sector (A+) – have been included in the analysis; Aramco’s composite rating is estimated at ‘A+’, while KSA
rating is estimated one notch lower at ‘A’ – the primary reason is, Aramco is not rated by S&P, while KSA is has an unsolicited rating from S&P, which makes KSA’s average rating one notch lower;
Source: Bloomberg/FAB
Total US$ value of hard currency ($/€/£/A$) bonds and sukuk outstanding: $382bn **
UA
E:
13
1.7
bn
K
SA
: $
10
4.8
bn
Q
AT
AR
: $
74
.7b
n
OM
AN
: $
29
.8b
n
BA
HR
AIN
: $
23
.8b
n
KU
WA
IT:
$1
7.0
bn
BBB range
AA
AA-
A+
A
A-
$14b
3.7% $37b
9.7%
$65b
17.0%
%
$35b
9.2%
$90b
23.6%
%
$33b
8.6%
$26b
6.8%
$34b
8.9%
$23b
6.0%
$25b
6.5%
BB range
94.5%
B range
86.1%
AA
47.0%
AA
22.1%
BBB
range
14.9%
A
71.4%
AA-
64.1%
A+
16.4%
A-
12.1%
8
Record issuance from the GCC in the primary Eurobond market
* Issuance figure till 5th July 2019; Source: Bloomberg/FAB
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019YTD*
Total Eurobond issuance in non-hard currency (other than $/€/£/A$)
2019 YTD*
CHF JPY HKD
IDR
CNY
Others
Split by currency
Split by Issuer ENBD FAB QNB ADCB
* GCC banks are the primary borrowers and
they prefer to raise their short-term funding
(1-5 years) through these currencies
* Panda bonds (CNY bonds issued by non-
Chinese issuers) dominates this category of
funding for GCC borrowers
2019 YTD*
US$ bn
0.0
10.0
20.0
30.0
40.0
50.0
60.0
KSA Sov
0.0
10.0
20.0
30.0
40.0
50.0
60.0
KSA Sov
0.0
10.0
20.0
30.0
40.0
50.0
60.0
KSA Sov
0.0
10.0
20.0
30.0
40.0
50.0
60.0
KSA Sov
0.0
10.0
20.0
30.0
40.0
50.0
60.0
KSA Sov
2019 YTD hard currency ($/€/£/A$) issuance split
KSA Qatar UAE Bahrain &
Kuwait
Total by
issuer type
US
$ b
n
45% 29% 22% 4% Market
share
Sov 44%
Fins 28%
GREs 25%
Corps 3%
KSA Sov
Aramco
Qatar Sov
QNB
FAB ENBD
Sharjah Sov
$10.9b
$12.0b
$12.0b
$24.1
bn
$15.6
bn
$13.9
bn
$1.7
bn
KSA issued €3bn bonds in July to become
the first GCC sovereign to issue EURO
denominated bonds. Please click here to
read our analysis of the EURO issue.
23.2 21.1
18.2 18.4 18.9
15.0
54.6
61.3
56.1
47.5
2.4 4.8
14.1 11.4
13.7
7.6
14.4
22.5
22.2
8.0
25.6 25.9
32.3 29.8
32.6
22.6
69.0
83.8
78.3
55.5
0
10
20
30
40
50
60
70
80
90
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019YTD*
US
$ b
illi
on
Total Eurobond issuance in hard currency ($/€/£/A$)
Total issuance
For this analysis we have considered major hard
currency ($/€/£/A$) bonds and sukuk issuances
from the six nations in the GCC. This includes
both fixed and floating rate issuances of $100m
or above and maturity of 1-year or above.
Conventional bond
Sukuk
Sovereign issuance as % of total GCC issue
25% 28% 21% 11% 10% 9% 60% 44% 58% 47%
9
GCC sovereign curves
~30-year tenor ~10-year tenor ~7-year tenor ~5-year tenor ~3-year tenor 2.00
2.20
2.40
2.60
2.80
3.00
3.20
3.40
3.60
3.80
4.00
4.20
4.40
4.604.60
5.10
5.60
6.10
6.60
7.10
7.60
4.60
2.7Y
4.9Y
6.9Y
28.5Y
3.0Y
5.7Y
6.5Y
10.2Y
28.2Y
2.8Y
5.7Y
9.8Y
23.6Y
2.8Y
2.5Y
2.7Y 3.3Y
Yie
ld t
o m
atu
rity
in
%
5.8Y
8.5Y
Notes: Curves as on 9-July-2019; “S” indicates sukuk; Source: Bloomberg/FAB
10
GCC fixed income – Local currency market
Notes: * For the above analysis we have considered local currency conventional bonds and Islamic bonds (sukuk) issuances from the six nations in the GCC. This includes both fixed and floating rate
issuances with maturity duration of 1-year or more at the time of issuance. Treasury bills issued by the governments are excluded from the analysis. Bond value shown are aggregate outstanding value
as at 5th July 2019; Source: Bloomberg/FAB
Total value of GCC local currency bonds and sukuk outstanding: $172bn*
Kuwait
80
92
0
20
40
60
80
100
120
140
160
180
Split by Bond/Sukuk
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
KSA
US
$ b
n
Qatar Oman Bahrain UAE
138
24
10
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
Split by Issuer Type
US
$ b
n
Sukuk
6.7yrs
Bonds
4.1yrs
Fins
4.2yrs Corps
6.4yrs
Sov
5.2yrs Local currency debt market in the GCC is
growing and sizable, but more skewed towards
short-term sovereign issuance with Saudi Arabia
being the biggest issuer.
Total o/s: $112bn
Avg. tenor: 6.2yrs
$29bn
4.5yrs
$12bn
2.4yrs
$9bn
4.0yrs
$9bn
2.4yrs
$1bn
1.3yrs $172bn
4.5yrs
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD'19
US
$ b
n
UAE Bahrain Oman Kuwait Qatar KSA
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD'19
US
$ b
n
Fin Corp Sov
New issue trend
15.1
22.6 19.0
39.1 41.4 39.9
27.2
16.7
24.9
14.5
Total issuance Total issuance
15.1
22.6 19.0
39.1 41.4 39.9
27.2
16.7
24.9
14.5
11
Global rates environment is expected to remain favourable for GCC/EM credits in both primary and secondary market
Note: Data shown till 9th July 2019; Source: Bloomberg/FAB
-0.50
-0.40
-0.30
-0.20
-0.10
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
10.5
11.0
11.5
12.0
12.5
13.0
13.5
14.0
Ju
n1
8
Ju
l18
Au
g1
8
Se
p18
Oc
t18
No
v18
De
c18
Jan
19
Fe
b1
9
Ma
r19
Ap
r19
Ma
y1
9
Ju
n1
9
Ju
l19
Global Aggregate Negative-Yielding Debt in US$ trillion (LHS)
Germany 10Y Yield in % (RHS)
France 10Y Yield in % (RHS)
Eurozone yields fall below zero as ECB readies for stimulus
Negative yielding debt
seen rapid rise this year
as Eurozone yields
turned negative on
ECB’s warning on
slowing growth
European investors' hunt for
yield has prompted many EM
burrowers to tap the EUR bond
market, Saudi Arabia being the
latest to issue EUR bonds. 1.25
1.50
1.75
2.00
2.25
2.50
2.75
3.00
3.25
3.50
1.25
1.50
1.75
2.00
2.25
2.50
2.75
3.00
3.25
3.50
Ju
n1
8
Ju
l18
Au
g1
8
Se
p18
Oc
t18
No
v18
De
c18
Jan
19
Fe
b1
9
Ma
r19
Ap
r19
Ma
y1
9
Ju
n1
9
Ju
l19
Rate implied by January 2020 FED Funds futures contract (%)
Effective FED Funds rate (%)
10Y US Treasury Yield (%)
Financial markets betting for rate cut/s from US FED
Jan’19
decision
Mar
decision May
decision
Jun
decision
Treasury yields are pushed lower in safe haven bids
amid trade war and global growth concerns. Financial
markets almost certain for a July interest rate cut
from the US Federal Reserve and pricing further cuts
going in to 2020, though the expectations have ebbed
slightly at the beginning of July
Dec
decision
Sep
decision
FOMC
Jun’18
decision
12
YTD investors are cautiously long on risk
Note: Data shown till 9th July 2019; Source: Bloomberg/FAB
-30.0
-25.0
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
2,350
2,400
2,450
2,500
2,550
2,600
2,650
2,700
2,750
2,800
2,850
2,900
2,950
3,000
3,050
Jan19 Feb19 Mar19 Apr19 May19 Jun19 Jul19
US 3m-10Y Yield Spread in bps (RHS) S&P 500 Equity Index (LHS)
S&P 500 vs US 3m-10Y yield spread
Current market pricing, with inverted yield curve and high risk asset
valuations, highlights a paradox between fixed income investors and issuers
• Macro uncertainties, driving dovish rates outlook, creates attractive
funding levels for fixed income issuers
• Despite macro uncertainties, low rates environment fuels hunt for yield
among investors, creating a fillip for risk appetite
• Fixed income market demand/supply dynamics buoyed by expectation
that interest rates will remain low(er) for the foreseeable future
US president Trump
escalated his trade war
rhetoric against China in
May which prompted a
sharp risk-off tone in
financial markets
A dovish tone from the US
central bank pressed
investors to start pricing a
rate cut in 2019
13
Secondary market performance of GCC credits
Note: Bloomberg Barclays GCC Credit (IG+HY) Index OAS refers to BGCCOAS Index available on Bloomberg; Data shown till 9th July 2019; Source: Bloomberg/FAB
98.0
100.0
102.0
104.0
106.0
108.0
110.0
112.0
Jan19 Feb19 Mar19 Apr19 May19 Jun19 Jul19
ADGB 3.125 10/27 8.3Y
KUWIB 3.5 3/27 7.7Y
QATAR 4 3/29 9.7Y
KSA 4.375 4/29 9.8Y
OMAN 5.625 1/28 8.5Y
BHRAIN 6.75 9/29 10.2Y
145.0150.0155.0160.0165.0170.0175.0180.0185.0190.0195.0200.0205.0210.0215.0220.0225.0
1.800
1.900
2.000
2.100
2.200
2.300
2.400
2.500
2.600
2.700
2.800
2.900
Jan19 Feb19 Mar19 Apr19 May19 Jun19 Jul19
Bloomberg Barclays GCC Credit (IG+HY) Index OAS in basis points (RHS) U.S. 10Y Yield in % (LHS)
YTD GCC credit spreads have tightened ~60 basis points
Cash price performance of long GCC sovereign
bonds on a rebased scale starting 2nd Jan 2019
Spreads widened as US-China
trade-war concerns mounted
in May and some profit taking
seen in some high-beta bonds
A combination of sharp fall in
rates, the hunt for yield, and
the allure of incremental yield
offered by blue-chip GCC
credits (backed with solid
fundamentals)…
… have helped GCC spreads
to tighten by ~36 basis points
since the beginning of June.
Long dated bonds were in
demand and high beta credits
like Oman and Bahrain also
benefited from the risk-on rally
14
Relative Value: GCC, Asia & Broader Emerging Markets
Note: Indices shown above are Bloomberg Barclays bond indices available on Bloomberg; Data as at 9-Jul-2019; GCC US$ IG & HY (Investment Grade & High Yield): BGCCTRUU Index; GCC US$ IG: BGCITRUU Index;
EM Asia US$ IG: BEUGTRUU Index; EM Asia US$ Aggregate: BEUCTRUU Index; EM IG US$: BEHGTRUU Index; EM Hard CCY Aggregate: LG20TRUU Index; Source: Bloomberg/FAB
A
A+
A-
BBB
BBB+
BBB-
3.00%
3.20%
3.40%
3.60%
3.80%
4.00%
4.20%
4.40%
4.60%
75 100 125 150 175 200 225 250 275 300
Yie
ld t
o m
atu
rity
(Y
TM
)
Option adjusted spread (OAS) in basis points
Bubble size indicates the average credit rating of the index. Bigger the bubble better the credit quality
Relative Value of various EM/GCC bond index
EM IG US$;
3.52%; 10.0Y GCC US$ IG & HY;
3.52%; 10.3Y
EM Asia US$ Aggregate;
4.29%; 6.2Y
EM Asia US$ IG;
3.32%; 7.1Y
EM Hard CCY Aggregate;
4.45%; 9.2Y
GCC US$ IG;
3.23%; 11.1Y
15
GCC inv. grade sovereign bonds vs EM peers: 7y to 10y
* Notes: Yields as on 9-Jul-2019; Composite rating - please refer Appendix for definition and calculation method; Dubai is not rated by any rating agency and we have assigned a proxy rating of
‘BBB+’ based on its fundamentals with a relative comparison to Emirate of Sharjah (A3/BBB+) and Dubai GREs like DP World (Baa1/BBB+) and DEWA (Baa1); Source: Bloomberg/FAB
Larger bubble indicates longer tenor
Smaller bubble indicates shorter tenor
ADGB 10/27 8.3Y CHILE 2/28 8.6Y
CHINA 10/27 8.3Y CHINA 10/28 9.3Y
COLOM 3/28 8.7Y
COLOM 3/29 9.7Y
DUGB 4/29 S 9.8Y
HKINTL 2/27 S 7.6Y
INDOIS 3/28 S 8.6Y
INDOIS 2/29 S 9.6Y
INDON 9/29 10.2Y
INDON 2/29 9.6Y
INDON 1/27 7.5Y
INDON 7/27 8Y
KOREA 1/27 7.5Y
KSA 10/26 7.3Y
KSA 4/27 S 7.8Y
KSA 3/28 8.6Y
KSA 1/29 S 9.5Y KSA 4/29 9.8Y
KUWIB 3/27 7.7Y
MALAYS 4/26 S 6.8Y
MEX 4/29 9.8Y
MEX 3/27 7.7Y
MEX 1/28 8.5Y
PHILIP 2/28 8.6Y
PHILIP 1/29 9.5Y
QATAR 6/26 6.9Y
QATAR 4/28 8.8Y
QATAR 3/29 9.7Y
RUSSIA 5/26 6.9Y
RUSSIA 6/27 8Y
RUSSIA 6/28 9Y
RUSSIA 3/29 9.7Y
SHARSK 3/28 S 8.7Y
2.45
2.55
2.65
2.75
2.85
2.95
3.05
3.15
3.25
3.35
3.45
3.55
3.65
3.75
3.85
3.95
4.05
1 2 3 4 5 6 7 8 9 10
Yie
ld t
o m
atu
rity
(Y
TM
) in
%
AA+ AA AA- A+ A A- BBB BBB- BBB+ *Composite rating
16
GCC inv. grade sovereign bonds vs EM peers: 20y to 30y
* Notes: Yields as on 9-Jul-2019; Composite rating - please refer Appendix for definition and calculation method; Dubai is not rated by any rating agency and we have assigned a proxy rating of
‘BBB+’ based on its fundamentals with a relative comparison to Emirate of Sharjah (A3/BBB+) and Dubai GREs like DP World (Baa1/BBB+) and DEWA (Baa1); Source: Bloomberg/FAB
Larger bubble indicates longer tenor
Smaller bubble indicates shorter tenor
ADGB 10/47 28.3Y
CHILE 10/42 23.3Y
CHILE 6/47 27.9Y CHINA 10/48 29.3Y
COLOM 6/45 25.9Y
COLOM 5/49 29.8Y
DUGB 1/43 23.6Y
INDON 4/43 23.8Y INDON 7/47 28Y
INDON 1/42 22.5Y INDON 1/47 27.5Y
INDON 1/46 26.5Y
KAZAKS 7/45 26Y
KOREA 6/44 24.9Y KOREA 9/48 29.2Y
KSA 10/46 27.3Y KSA 10/47 28.2Y
KSA 4/49 29.8Y KSA 1/50 30.5Y
MALAYS 4/46 S 26.8Y
MALAYS 4/45 S 25.8Y
MEX 2/48 28.6Y
MEX 1/46 26.5Y MEX 1/45 25.5Y
MEX 1/40 20.5Y
PHILIP 1/40 20.5Y PHILIP 2/42 22.6Y
QATAR 1/40 20.5Y
QATAR 6/46 26.9Y
QATAR 1/42 22.5Y
QATAR 3/49 29.7Y QATAR 4/48 28.8Y
ROMANI 1/44 24.5Y
ROMANI 6/48 28.9Y
RUSSIA 9/43 24.2Y
RUSSIA 6/47 28Y
3.00
3.10
3.20
3.30
3.40
3.50
3.60
3.70
3.80
3.90
4.00
4.10
4.20
4.30
4.40
4.50
4.60
1 2 3 4 5 6 7 8 9 10 11
Yie
ld t
o m
atu
rity
(Y
TM
) in
%
AA+ AA AA- A+ A A- BBB BBB- BBB+ *Composite rating BB+
17
GCC sub-inv. grade sovereign bonds vs EM peers: 7y to 10y
* Notes: Yields as on 9-Jul-2019; Composite rating - please refer Appendix for definition and calculation method; Source: Bloomberg/FAB
Larger bubble indicates longer tenor
Smaller bubble indicates shorter tenor
OMAN 6/26 6.9Y
OMAN 3/27 7.7Y OMAN 1/28 8.5Y
PARGUY 3/27 7.7Y
SOAF 4/26 6.8Y
SOAF 9/27 8.2Y
SOAF 10/28 9.3Y
AZERBJ 9/29 10.1Y
BAHAMA 11/28 9.4Y
BAHAMA 11/29 10.4Y
BRAZIL 4/26 6.7Y
BRAZIL 5/27 7.8Y BRAZIL 1/28 8.5Y
BRAZIL 5/29 9.9Y
BRAZIL 3/30 10.7Y DOMREP 1/26 6.6Y
DOMREP 1/27 7.5Y
DOMREP 4/27 7.8Y
SRILAN 4/28 8.8Y
SRILAN 3/29 9.7Y
DOMREP 7/28 9Y
TURKEY 4/26 6.8Y
TURKEY 10/26 7.2Y
TURKEY 2/28 8.6Y
TURKEY 10/28 9.3Y
TURKEY 4/29 9.8Y
BHRAIN 1/26 6.5Y
BHRAIN 10/28 9.3Y
BHRAIN 9/29 10.2Y
JORDAN 1/26 6.6Y
JORDAN 1/27 7.6Y
KENINT 2/28 8.6Y
EGYPT 1/27 7.6Y
EGYPT 2/28 8.6Y
EGYPT 3/29 9.6Y
PNGIB 10/28 9.2Y
GHANA 1/26 6.5Y
GHANA 3/27 7.7Y
GHANA 5/29 9.9Y
NGERIA 11/27 8.4Y
NGERIA 2/30 10.6Y
ANGOL 5/28 8.8Y
3.10
3.30
3.50
3.70
3.90
4.10
4.30
4.50
4.70
4.90
5.10
5.30
5.50
5.70
5.90
6.10
6.30
6.50
6.70
6.90
7.10
7.30
7.50
10 11 12 13 14 15 16
Yie
ld t
o m
atu
rity
(Y
TM
) in
%
BB+ BB BB- B+ B B- *Composite rating
18
GCC sub-inv. grade sovereign bonds vs EM peers: 20y to 30y
* Notes: Yields as on 9-Jul-2019; Composite rating - please refer Appendix for definition and calculation method; Source: Bloomberg/FAB
Larger bubble indicates longer tenor
Smaller bubble indicates shorter tenor
OMAN 3/47 27.7Y
OMAN 1/48 28.5Y
PARGUY 3/48 28.7Y PARGUY 3/50 30.7Y
SOAF 3/41 21.7Y SOAF 7/44 25Y
SOAF 10/46 27.3Y
SOAF 9/47 28.2Y
SOAF 6/48 29Y
BRAZIL 1/41 21.5Y BRAZIL 1/45 25.6Y BRAZIL 2/47 27.6Y
DOMREP 4/44 24.8Y DOMREP 1/45 25.6Y DOMREP 2/48 28.6Y
TURKEY 1/41 21.5Y
TURKEY 4/43 23.8Y
TURKEY 2/45 25.6Y
TURKEY 5/47 27.8Y
BHRAIN 9/44 25.2Y
BHRAIN 9/47 28.2Y
KENINT 2/48 28.6Y
EGYPT 4/40 20.8Y
EGYPT 1/47 27.6Y
EGYPT 2/48 28.6Y
EGYPT 3/49 29.6Y
GHANA 6/49 29.9Y
GHANA 3/51 31.7Y
SENEGL 3/48 28.7Y
JORDAN 10/47 28.3Y
NGERIA 11/47 28.4Y
NGERIA 1/49 29.5Y
ANGOL 5/48 28.8Y
4.50
4.75
5.00
5.25
5.50
5.75
6.00
6.25
6.50
6.75
7.00
7.25
7.50
7.75
8.00
8.25
8.50
8.75
10 11 12 13 14 15 16
Yie
ld t
o m
atu
rity
(Y
TM
) in
%
BB+ BB BB- B+ B B- *Composite rating
19
GCC credit quality at a glance U
nit
ed
Ara
b E
mir
ate
s (
UA
E)
Em
ira
te o
f A
bu
Dh
ab
i
Ku
wa
it
Qa
tar
Kin
gd
om
of
Sa
ud
i A
rab
ia
Em
ira
te o
f R
as
Al-
Kh
aim
ah
Em
ira
te o
f S
ha
rja
h
Em
ira
te o
f D
ub
ai*
Su
lta
na
te o
f O
ma
n
Kin
gd
om
of
Ba
hra
in
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Co
mp
osit
e R
ati
ng
AD
NO
C
Ab
u D
ha
bi
Cru
de
Oil
Pip
eli
ne
Mu
ba
da
la
Wa
ha
Qa
tari
Dia
r
Qa
tar
Pe
tro
leu
m
Eti
sa
lat
RA
SG
AS
Ap
ico
rp
Ind
us
trie
s Q
ata
r
Sa
ud
i A
ram
co
Do
lph
in E
ne
rgy
QG
TS
(N
ak
ila
t)
SE
CO
SA
BIC
Eti
ha
d
Qa
tar
Rein
su
ran
ce
Sa
ud
i T
ele
co
m
Ge
ne
ral
Ho
ldin
g (
SE
NA
AT
)
Oo
red
oo
(Q
tel)
Ta
qa
DP
Wo
rld
DE
WA
MA
F
JA
FZ
Ald
ar
EQ
UA
TE
Pe
tro
ch
em
DIF
C I
nve
stm
en
t
Em
aa
r M
all
s G
rp
Ku
wa
it P
roje
cts
Co
Em
aa
r P
rop
Alm
ara
i
NM
C H
ea
lth
Ma
zo
on
Ele
ctr
icit
y C
o
OM
GR
ID In
ve
stc
orp
Dam
ac
Oil
an
d G
as
Ho
ldin
g
Mu
mta
lak
at
Bate
lco
Dar
Al
Ark
an
Ezd
an
Ho
ldin
g
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Co
mp
osit
e R
ati
ng
IsD
B
FA
B
NB
K
Em
ira
tes
De
v.
Ban
k
QN
B
Ind
Ban
k o
f K
uw
ait
Ku
wa
it In
tl B
an
k
KF
H
ISC
OD
V
AD
CB
Al-
Hila
l
AD
IB
QIB
QIIB
Al
Ah
li B
an
k o
f K
uw
ait
CB
K
Gu
lf B
an
k
EN
BD
Em
ira
tes
Is
lam
ic B
an
k
Ah
li B
an
k Q
SC
Bo
ub
ya
n b
an
k
SA
BB
Do
ha
Ba
nk
CB
Q
Al
Kh
ali
j
NC
B
Sa
mb
a
Al
Rajh
i
Riy
ad
Ba
nk
Du
ba
i Is
lam
ic B
an
k
No
or
Gu
lf In
v C
orp
Bu
rga
n B
an
k
Wa
rba
Ba
nk
Ma
sh
req
BS
F
Ara
b N
ati
on
al B
an
k
Co
m B
an
k o
f D
ub
ai
Sa
ud
i H
oll
an
di
Sa
ud
i In
v B
an
k
Gu
lf In
tl B
an
k
Ta
mw
ee
l
Ban
k o
f S
ha
rja
h
Sh
arj
ah
Is
lam
ic B
an
k
RA
KB
AN
K
NB
F (
Fu
jair
ah
)
UA
B
Ah
li U
nit
ed
Ba
nk
AB
C
HS
BC
Ban
k O
ma
n
NB
O
Om
an
Ara
b B
an
k
Ban
k M
us
ca
t
Ban
k D
ho
far
Ban
k S
oh
ar
Ah
li B
an
k S
AO
G
Al
Bara
ka
Ban
kin
g G
rou
p
NB
B
BB
K
GF
H
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Co
mp
osit
e R
ati
ng
AA
AA-
A+
A
A-
BBB+
BBB
BBB-
BB+
BB
BB-
B+
AA+
B
GCC Sovereigns GCC Corporates
AA+
AA
AA-
A+
A
A-
BBB+
BBB
BBB-
BB+
BB
BB-
B+
GCC Financials
AA+
AA-
AA
A+
A
A-
BBB+
BBB
BBB-
BB+
BB
AAA
B+
BB-
B
Notes: The ratings mentioned here are composite credit rating for each issuer. Please see appendix for the methodology of calculating composite credit rating; * Dubai is not rated by any rating agency and we have assigned
a proxy rating of ‘BBB+’ based on its fundamentals with a relative comparison to Emirate of Sharjah (A3/BBB+) and Dubai GREs like DP World (Baa1/BBB+) and DEWA (Baa1); Source: Bloomberg/FAB
B B-
20
GCC’s major primary deals in 2019 and their performance Secondary market performance since issue (change in z-spread and cash price since issue till 9-Jul-19)
Notes: (S) in the ticker indicates Sukuk; All bonds/sukuks are US$ senior unsecured debt of the issuer unless an abbreviation for the debt type is highlighted – e.g. – “Unsec” = Unsecured debt; “Sub” =
Subordinated; “Sr Sub” = Senior Subordinated; “Jr Sub” = Junior Subordinated; “Perp” = Perpetual; Callable, Puttable and Sinkable highlighted as “Call”, “Puta”, & “Sink” respectively; Source: Bloomberg/FAB
KSA 2 39 € (2/Jul)
STCAB 3.89 29 (S) (2/May)
MAFUAE 4.638 29 (S) (7/May)
KIBKK 5.625 (S) Jr Sub PERP Nxt C: 6/10/2024 (29/May)
SIB 5 (S) Jr Sub PERP Nxt C: 7/2/2025 (25/Jun)
BBK 5.5 24 (2/Jul)
BGBKKK 5.7492 Jr Sub PERP Nxt C: 7/9/2024 (2/Jul)
KSA 0.75 27 € (2/Jul)
-2 0 2 4 6 8 10 12 14 16 18 20
+2.0
+0.6
-0.4
+0.3
+0.2
+3.4
+4.7
+3.9
+1.1
+1.7
+2.7
+4.0
+3.5
+2.9
+3.0
+3.0
+3.3
+3.7
+8.5
+14.8
+3.0
+4.4
+4.5
+2.7
+4.3
+6.1
+4.2
+10.2
+17.4
Cash price change Z-spread change (in bps)*
KSA 5.25 50 (9/Jan)
KSA 4.375 29 (9/Jan)
FABUH 3.875 24 (S) (15/Jan)
DIBUH 6.25 (S) Jr Sub PERP Nxt C: 1/22/2025 (16/Jan)
MASQUH 4.25 24 (19/Feb)
MUMTAK 5.625 24 (S) (20/Feb)
QIIKQD 4.264 24 (S) (26/Feb)
ALMARA 4.311 24 (S) (26/Feb)
EMDEBK 3.516 24 (27/Feb)
QATAR 4.817 49 (6/Mar)
QATAR 4 29 (6/Mar)
QATAR 3.375 24 (6/Mar)
EBIUH 6.125 Jr Sub PERP Nxt C: 3/20/2025 (13/Mar)
QNBK 3.5 24 (21/Mar)
SHARSK 3.854 26 (S) (26/Mar)
RAKBNK 4.125 24 (2/Apr)
ARAMCO 4.375 49 (9/Apr)
ARAMCO 4.25 39 (9/Apr)
ARAMCO 3.5 29 (9/Apr)
ARAMCO 2.875 24 (9/Apr)
ARAMCO 2.75 22 (9/Apr)
Bond/Sukuk
(Pricing date in dd/mm)
-80 -70 -60 -50 -40 -30 -20 -10 0 10 20 30
-12.5
-7.6
+7.6
-8.8
-18.2
-58.2
-14.3
+6.0
+8.8
+11.9
+17.2
+17.0
+24.6
-18.0
-11.6
-14.5
-2.9
-11.6
-30.6
-19.4
-0.7
-37.8
-39.3
+1.7
-31.6
-50.2
-22.2
-47.2
-40.4
21
GCC spread performance summary Top 10 / bottom 10 bond/sukuk performers (z-spread, bps) in each category from 31st Dec 2018 to 9th Jul 2019
-125-100-75-50-250255075100
+26
+9
-1
-4
-4
-8
-12
-12
-12
-13
-61
-62
-63
-69
-86
-87
-99
-104
-105
-124
Sovereigns
BHRAIN 5.5 20
OMAN 3.875 22
BHRAIN 5.875 21
OMANGS 4.397 24 (S)
OMAN 3.625 21
OMAN 4.125 23
BHRAIN 6.125 22
BHRAIN 5.624 24 (S)
BHRAIN 7 28
KSA 2.875 23
OMAN 6.75 48
KSA 2 39 € *2/7/19
SHARSK 3.854 26 (S) *26/3/19
QATAR 3.375 24 *6/3/19
KSA 0.75 27 € *2/7/19
DUGB 5.25 43
QATAR 4.625 46
SHARSK 4.226 28 (S)
DUGB 5 29 (S)
ADWA 3.925 20 SINK
-150-100-50050100
+8
-1
-3
-8
-9
-13
-15
-18
-18
-22
-84
-84
-88
-89
-89
-90
-102
-106
-120
-135
Financials
BOSUH 3.374 20
BBK 3.5 20
ABQKQD 3.5 22
NOORBK 6.25 (S) Jr Sub PERP Nxt C: 1/6/21
ALAHKW 7.25 Jr Sub PERP Nxt C: 26/9/23
BOSUH 4.23 22
ADCBUH 2.625 20
EBIUH 6.375 Jr Sub PERP Nxt C: 17/9/20
COMQAT 3.25 21
AUBBI 6.875 Jr Sub PERP Nxt C: 29/4/20
FABUH 3.875 24 (S) *15/1/19
SIB 5 (S) Jr Sub PERP Nxt C: 2/7/25 *25/6/19
RAKBNK 4.125 24 *2/4/19
EIBUH 3.542 21 (S)
ADIBUH 7.125 (S) Jr Sub PERP Nxt C: 20/9/23
BBK 5.5 24 *2/7/19
BKMBOM 4.875 23
EBIUH 6.125 Jr Sub PERP Nxt C: 20/3/25 *13/3/19
EMDEBK 3.516 24 *27/2/19
BGBKKK 5.7492 Jr Sub PERP Nxt C: 9/7/24 *2/7/19
-175-150-125-100-75-50-250255075100125150
+25
+17
+17
+12
+9
+6
+2
+0.3
-1
-8
-67
-71
-72
-83
-90
-109
-110
-112
-120
-168
Corporates
KWIPKK 9.375 20
MAFUAE 5.5 Jr Sub PERP Nxt C: 7/9/22
KWIPKK 5 23
OTELOM 5.625 23 Sec
KWIPKK 4.5 27
OILGAS 8.375 28
OILGAS 7.625 24
OILGAS 7.5 27
OMGRID 3.958 25
MUMTAK 4 21 (S)
MUBAUH 5.875 21
QTELQD 4.5 43
MUBAUH 6.875 26
MUMTAK 5.625 24 (S) *20/2/19
STCAB 3.89 29 (S) *2/5/19
ARAMCO 2.75 22 *9/4/19
ARAMCO 2.875 24 *9/4/19
ARAMCO 4.25 39 *9/4/19
ARAMCO 3.5 29 *9/4/19
ARAMCO 4.375 49 *9/4/19
Notes: (1) We have used a list of GCC public debt which are quoted by FAB trading desk and have maturity in 2020 and beyond; (2) (S) in the ticker indicates Sukuk; (3) All bonds/sukuks are $
denominated unless any other currency is highlighted in the ticker. (3) All bonds/sukuks are senior unsecured debt unless an abbreviation for the debt type is highlighted in the ticker – e.g. – “Unsec” =
Unsecured debt junior to Senior Unsecured debt; ; “Sub” = Subordinated; “Sr Sub” = Senior Subordinated; “Jr Sub” = Junior Subordinated; “Perp” = Perpetual; Callable, Puttable and Sinkable highlighted
as “Call”, “Puta”, & “Sink” respectively; (4) * highlights spread change from the 1st settlement date of the bond as it was issued in 2019; Source: FAB/Bloomberg
22
Sovereigns spread performance – Abu Dhabi
Source: FAB/Bloomberg
AD
GB
2.1
25
21
AD
GB
2.5
22
A
DG
B 3
.12
5 2
6
AD
GB
3.1
25
27
AD
GB
4.1
25
47
-29
-28
-39
-38
-18
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
110.0
120.0
130.0
140.0
150.0
160.0
z-s
pre
ad
(b
ps)
Maturity Long
term
Short
term 9-Jul-19 31-Dec-18 Curve on 31-Dec-18 Curve on 9-Jul-19
23
Sovereigns spread performance – Kuwait
Source: FAB/Bloomberg
KU
WIB
2.7
5 2
2
KU
WIB
3.5
27
-34
-24
30.0
35.0
40.0
45.0
50.0
55.0
60.0
65.0
70.0
75.0
80.0
85.0
90.0
z-s
pre
ad
(b
ps)
Maturity Long
term
Short
term 9-Jul-19 31-Dec-18 Curve on 31-Dec-18 Curve on 9-Jul-19
24
Sovereigns spread performance – Qatar
QA
TAR
5.2
5 2
0
QA
TAR
2.3
75
21
QA
TAR
4.5
22
QA
TAR
3.2
41
23
(S)
QA
TAR
3.8
75
23
QA
TAR
3.3
75
24
*
6/3
/19
QA
TAR
3.2
5 2
6
QA
TAR
4.5
28
QA
TAR
4 2
9
*6
/3/1
9
QA
TAR
9.7
5 3
0
QA
TAR
6.4
40
QA
TAR
5.7
5 4
2
QA
TAR
4.6
25
46
QA
TAR
5.1
03
48
QA
TAR
4.8
17
49
*
6/3
/19
-20
-25
-31
-32 -35
-12
-24
-26
-31 -29
-26
-14
-4
-19 -19
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
110.0
120.0
130.0
140.0
150.0
160.0
170.0
180.0
190.0
200.0
210.0
z-s
pre
ad
(b
ps)
Maturity
9-Jul-19 31-Dec-18
Long
term
Short
term
Notes: * Highlights spread change from the pricing date as the bond was issued in 2019; If "Sukuk", the ticker contains "(S)" next to the maturity year; Source: FAB/Bloomberg
Curve on 31-Dec-18 Curve on 9-Jul-19
25
Sovereigns spread performance – Saudi Arabia
KSA
2.3
75
21
KSA
2.8
94
22
(S)
KSA
2.8
75
23
KSA
4 2
5
KSA
3.2
5 2
6
KSA
3.6
28
27
(S)
KSA
3.6
25
28
KSA
4.3
03
29
(S)
KSA
4.3
75
29
*
9/1
/19
KSA
4.5
30
KSA
4.5
46
KSA
4.6
25
47
KSA
5 4
9
KSA
5.2
5 5
0
*9
/1/1
9
-58 -56
-61
-61
-48
-28 -45
-32 -47 -50
-27 -31 -31 -40
30.0
45.0
60.0
75.0
90.0
105.0
120.0
135.0
150.0
165.0
180.0
195.0
210.0
225.0
240.0
255.0
270.0
z-s
pre
ad
(b
ps)
Maturity
Notes: * Highlights spread change from the pricing date as the bond was issued in 2019; If "Sukuk", the ticker contains "(S)" next to the maturity year; Source: FAB/Bloomberg
Long
term
Short
term 9-Jul-19 31-Dec-18 Curve on 31-Dec-18 Curve on 9-Jul-19
26
Sovereigns spread performance – Dubai
DU
GB
7.7
5 2
0
DU
GB
5.5
91
21
PU
TA
DU
GB
6.4
5 2
2 (
S)
DU
GB
3.8
75
23
(S)
DU
GB
5 2
9 (
S)
DU
GB
5.2
5 4
3
-24
-39 -40
-17
+9
-4
0.0
25.0
50.0
75.0
100.0
125.0
150.0
175.0
200.0
225.0
250.0
z-s
pre
ad
(b
ps)
Maturity
9-Jul-19 31-Dec-18
Long
term
Short
term
Notes: If "Sukuk" the ticker contains "(S)" next to the maturity year; Source: FAB/Bloomberg
Curve on 31-Dec-18 Curve on 9-Jul-19
27
Sovereigns spread performance – Sharjah
Notes: * Highlights spread change from the pricing date as the bond was issued in 2019; If "Sukuk", the ticker contains "(S)" next to the maturity year; Source: FAB/Bloomberg
SHA
RSK
3.8
39
21
(S)
SHA
RSK
3.7
64
24
(S)
SHA
RSK
3.8
54
26
(S)
*
26
/3/1
9
SHA
RSK
4.2
26
28
(S)
-20
-15
-12
-1
75
85
95
105
115
125
135
145
155
165
175
z-s
pre
ad
(b
ps)
Maturity Long
term
Short
term 9-Jul-19 31-Dec-18 Curve on 31-Dec-18 Curve on 9-Jul-19
28
Sovereigns spread performance – Oman
OM
AN
3.6
25
21
OM
AN
3.8
75
22
OM
AN
4.1
25
23
OM
AN
GS
4.3
97
24
(S)
OM
AN
GS
5.9
32
25
(S)
OM
AN
4.7
5 2
6
OM
AN
5.3
75
27
OM
AN
5.6
25
28
OM
AN
6.5
47
OM
AN
6.7
5 4
8
-87
-105
-86
-99
-59
-45
-60 -53
-18
-13
190.0
210.0
230.0
250.0
270.0
290.0
310.0
330.0
350.0
370.0
390.0
410.0
430.0
450.0
470.0
490.0
510.0
530.0
550.0
570.0
z-s
pre
ad
(b
ps)
Maturity
9-Jul-19 31-Dec-18
Long
term
Short
term
Notes: If "Sukuk" the ticker contains "(S)" next to the maturity year; Source: FAB/Bloomberg
Curve on 31-Dec-18 Curve on 9-Jul-19
29
Sovereigns spread performance – Bahrain
BH
RA
IN 5
.5 2
0
BH
RA
IN 5
.87
5 2
1
BH
RA
IN 6
.12
5 2
2
BH
RA
IN 6
.12
5 2
3
BH
RA
IN 5
.62
4 2
4 (
S)
BH
RA
IN 5
.25
25
(S)
BH
RA
IN 6
.87
5 2
5 (
S)
BH
RA
IN 7
26
BH
RA
IN 7
28
BH
RA
IN 6
.75
29
BH
RA
IN 6
44
BH
RA
IN 7
.5 4
7
-124
-104
-69
-47 -63
-55 -60
-50
-62 -54
-23
-31
75.0
100.0
125.0
150.0
175.0
200.0
225.0
250.0
275.0
300.0
325.0
350.0
375.0
400.0
425.0
450.0
475.0
500.0
525.0
z-s
pre
ad
(b
ps)
Maturity
9-Jul-19 31-Dec-18
Long
term
Short
term
Notes: If "Sukuk" the ticker contains "(S)" next to the maturity year; Source: FAB/Bloomberg
Curve on 31-Dec-18 Curve on 9-Jul-19
30
Appendix
As mentioned at the start of this report, we have used “composite ratings” for this analysis – i.e. the average
of the ratings assigned by three leading rating agencies Moody’s, S&P and Fitch – in order to provide a more
representative view of the credit strength of each bank.
The composite rating is calculated as follows:
A score is assigned to the rating from each rating agency: AAA or equivalent being the best with a score
of “1”, followed by AA+ or equivalent as “2”, AA or equivalent as “3”, AA- or equivalent as “4” and so on;
For example FAB is rated Aa3/AA-/AA- by Moody’s/S&P/Fitch. So the scores are 4/4/4;
Hence the average of the scores is “4” which indicates a composite rating of “AA-” for FAB;
In case the average score is not an absolute number – e.g. 4.33 (average of 4, 5, & 4 ) – the final score
is derived by rounding off the average score to the nearest whole number. In this case “4”.
31
Thank You
Chavan Bhogaita
Managing Director, Head of Market Insights & Strategy,
Global Markets, First Abu Dhabi Bank
Tel: +971 2 6110 127
Rakesh Sahu
Director, Market Insights & Strategy,
Global Markets, First Abu Dhabi Bank
Tel: +91 22 333 11138
Market Insights & Strategy
Global Markets
First Abu Dhabi Bank
MarketInsights&[email protected]
Please click here to view our recent
publications on MENA and Global Markets
